Similarly to what occurred a few years back with the introduction and rapid rise of low-cost microstock, current trend indicate the steady rise of free stock photos and its potential wide effect on the industry.

Two years ago, when we produced a panel for the DMLA annual conference called the “Business of Free”,  attendees were surprised to hear about the revenue generated by some of the companies. The assumption was that if they offered free photos, they couldn’t possibly be profitable. The panelists, representatives of Freepik, Morguefile and Mitch Martinez, proved them wrong.

In a nutshell, they explained that by monetizing the large volume of traffic generated by the appeal of free, they not only more than cover the lack of licensing fees but exceeded the profit of most traditional stock photo agencies.

 

Freepik, from Spain, hires free lancers to create its content

Freepik, from Spain, hires freelancers to create its content

Two Models

The model consists in converting the traffic into 2 revenue sources. One is advertising,  the second is affiliate fees:

– Advertising is simple: Traffic is enticed to click on relevant banner ads. Each click is rewarded by a fee paid by the advertiser. Calculated by the thousands, or CPM, they can generate a substantial amount when multiplied by large numbers. At .20 per CPM, multiplied by 1 million, and you get $200,000. Not bad.

– Affiliate works by forwarding traffic to a more traditional photo agency, one that charges per license. When users perform a search, they are shown a mix of free and paid photos, with the paid ones usually of much better quality. When they select those, users are reoriented to the site where they purchase the image. Each time this happens, the free site gets a kick back, an affiliate fee of usually 15 to 20% of the sale price.

Combine both revenues and you have a very healthy business. Freepik even goes as far as using some of their profit to hire freelancers to create content, which they then place for free on their site. Some freelancers make a living thanks to this.

The appeal of free content is more powerful than generally estimated. Unsplash, another successful free photo site claims 1,63 billion views a month. Billion yes, not million.

 

Unsplash, one of the most popular free photo website

Unsplash, one of the most popular free photo website

Irony

The irony of these free photo websites is that they work in almost an opposite way: Unlike paid photo websites, who will do whatever they can to make sure you find the image you need,  free photos site much prefer if you have a hard time finding it. Why? The more time you spend on their site looking for your pictures, the more advertising they can show you. As well, you will be more willing to spend  $5 for that image they showed you from the paid photo website. Either way, they win.

The second irony is that some of these sites are parasitic to traditional stock agencies since they rely heavily on the affiliate revenue. While they compete by offering free photos, they couldn’t do so if there were no agencies charging for photos. 

Interestingly enough, part of the popularity of some free sites like Unsplash, is their well-curated content. Unlike large paying stock sites with tens of millions of images, free photos website can offer less than 10,000 images and hardly more than a few hundred thousand. They don’t need to offer more as their true purpose is not to help users find the image they need. As we have seen, it is either to sell advertising, redirect traffic or a completely different service. 

The Lost Leaders

Others, however, do not follow any of these models. They are lost just leaders.

Take Unsplash, for example. Until recently, this very popular site was just a marketing arm of Crew, a  freelancer marketplace. Its only purpose was generating traffic to the Crew website.  Realizing the huge success of Unsplash, the creators have just spun the two companies apart, selling Crew and focusing exclusively on the free photo website.

Traditional stock houses, like Getty Images, have launched their own free photo website, as a lure to their paying one. Called Freeimages, the site is a mostly a huge referral platform. Dreamstime also has it own, stockfreeimages.

 

Freeimages.com, the Getty powered free stock photo website

Freeimages.com, the Getty powered free stock photo website

 

    Recently, e-commerce website Shopify has launched its own free photo website, called Burst. Aimed at providing its users with photos for their stores or marketing campaigns, it is open to anyone.  Hubspot, an inbound sales and marketing software company also launched its own free site,  FreestockPhotos. Not to be confused with Freestockphotos which points to a Christian blog ( and is an affiliate of Shutterstock). Both also lost leaders.

A search for “free photos” on Google returns 943 million results with over 100 pointing to free photos providers. It’s no surprise, as they are extremely easy to set up and with the right SEO strategy, can lead to comfortable revenue.  Companies like Shutterstock love them as they bring them vast quantities of buyers, mostly unique or low budget, without having to spend any of their marketing dollars. But it can become a toxic relationship.

So, what does it mean in the big (free) picture?

The risk is that more companies like Shopify or Hubspot decide to launch free photo website as lost leaders. Since they do not care about revenue, at least from selling photos, they do not convert any of their traffic to paying website. Because of their convenience, they could easily suck away a chunk of buyers that would have otherwise bought from microstock.

With healthy revenue, a symbiotic existence with paid content, an unlimited access to content and feeding on the internet insatiable appetite for anything free,  free stock photo sites are on very fertile grounds. Currently operated by small independent companies, it will not be surprising to see a consolidation in the near future as this space thrives at scale. Will they overtake paid stock photo agencies? Probably not, as they serve only a segment of the market. But not unlike microstock years ago, they will become an essential part of any company’s portfolio that seeks to cover all layers of the photo licensing marketplace.

  

Photo by khawkins04

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4 Thoughts on “Free photos: threat or opportunity?

  1. After free what will be the next disruption on this fragile market? Is anything more free than free? https://t.co/wxBySZNw6o

  2. Free photos: threat or opportunity? https://t.co/SJMihPCYlr via @melchp

  3. Free photos websites: strategies for a healthy business https://t.co/aizyOvpgFr

  4. There’s no such thing as a free lunch, but…..: https://t.co/YVc2sOx4iE

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